The CAP no longer fits

If there was any doubt before, the Local and Euro Election results indicate there is no doubt that the future of Britain in the EU and perhaps of the entire EU project, now hangs in the balance. Euro scepticism has shown its face, both the right and left side, though the right is getting most of the media attention.

One of the central policy planks of the EU, from its very first days, has been the Common Agricultural Policy. Its original purpose was to ensure that the starvation and food shortages which haunted post-war western Europe would never happen again; and also perhaps created as a means of quietly allowing Germany to pay war reparations to France without anyone else noticing. But from such arguably rational beginnings, a monster was born.

By the 1970s and 80s overproduction was the target, and this created the milk and wine lakes, the butter and cheese mountains of legend. Intervention buying guaranteed a very good price for farm products regardless of the laws of supply and demand, and encouraged ever greater production and overproduction. In the uplands, headage payments encouraged farmers to put far too many sheep on the hills grazing them even barer than they already were.

Despite some efforts to reverse the effects of such powerful policy drivers – such as Agri-Environment Schemes, the CAP continues to encourage farmers to produce food intensively. In 2003 agricultural payments were “de-coupled” after threats from the WTO that fines would be imposed on Europe for providing state subsidies to agriculture. The decoupling has not led to lower levels of production, indeed production intensity has continued to increase, farm size has continued to increase and the number of people employed in agriculture has dwindled further.

The CAP and all its accretions have broken free from the constraints of rational decision making. The European Commission’s Directorate General Agriculture, the once mighty pre-eminent DG in Brussels, has lost its grasp of the leash. Subject to efforts to pull the CAP monster in a number of different directions at once, it has responded by developing an absurdist approach to policy development. It may have been a collective act of psychic defence on the part of the Eurocrats involved.

 

CAP Madness

For example there was the 50 trees rule, dreamt up in 2003. The problem? Farmers were claiming CAP payments on land which could be classified as forestry. This would not do. Forestry was dealt with under a separate EC directorate. Forestry was not agriculture. Nobody at DG Agriculture had heard of Agro-forestry, let alone silvopastoralism. Habitats such as Scandinavian wooded meadows or Iberican Dehesa, landscapes that were a thousand years old and more, could not exist. So a rule had to be invented to abolish them, exile them from agricultrural support. The 50 Trees rule was born. Any land which had more than 50 trees per hectare on it was instantly not agricultural land, and could not receive single farm payment. What happened? Small family farmers in Scandinavia, desperate to receive some support, started chopping down the ancient trees in their wooded meadows, destroying a Natura 2000 Habitat. Weeping as they did so I would imagine.

Then there was the GAEC 12 (Good Agricultural and Environmental Condition) about removal of encroaching vegetation. After farm payments were decoupled from production in 2003, farmers could in theory do nothing to their farmland and just receive the farm payment. This was deemed to be unacceptable; and verging on fraud. Why should hard working taxpayers pay farmers to not grow food? It was a return to the world of Catch 22, where Major Major’s father made a fortune being paid not to grow alfalfa. So DG Agriculture developed another cunning rule. Any field where vegetation was seen to be encroaching on the farmland (sounds sinister) would be potentially refused farm payments. This led to the absurd situation where a CAP inspector found a single stem of wild rose in a Bulgarian meadow and rejected the farmer’s claim for CAP support. In other places, farmers had to “top” fields that were not being grazed, mown or cultivated. Topping in this context means cutting vegetation down just while it’s flowering, which is not very environmentally friendly.

Concerned that farmers in France and Germany were overenthusiastically converting grassland to maize production, DG Agriculture brought in the Permanent Pasture rule. This rule stated that each member state must map its permanent pasture and ensure that, over a 7 year period, the total area under permanent pasture did not fall by 10%. But just to make it a bit easier for farmers to comply with, they defined permanent pasture as anything from fantastically wildlife-rich unimproved grassland that was centuries old, through to stubble turnips; and everything in between. It was fine for a farmer to cultivate and re-seed a field with ryegrass every year; that still made it Permanent Pasture, as long as it wasn’t converted into an annual arable crop. A centuries old pasture could be converted to intensive rye grass, and it would still be “protected” by the permanent pasture rule. Suggestions that this rule might be tightened up led to large scale ploughing in 2011-2013, including losses of wildlife-rich grasslands. This rule is now being challenged, though not for environmental reasons.

The final stop on our whistlestop tour around the Absurd CAP rules theme-park (CAP-orama perhaps) concerns eligible land. As the problem of fraud continued to bedevil the payment of farming subsidies across Europe, The European Court of Auditors started to lean hard on DG Agriculture to get a bit stricter about what land qualified for farm payments. By using the 50 trees rule and the encroaching vegetation rule, along with some nifty new rules, it became a cinch to exclude millions of hectares of low intensity, infrequently grazed farmland across Europe from farm payments, while golf courses and airports remained eligible, on account of their being regularly mown.

This developed into an entire sub-industry of defining and mapping temporary or permanent ineligible features (TIFs and PIFs). Hedges were only allowed to be 2m wide, or 6m in exceptional circumstances and anything like a pond or a patch of scrub had to be less than 100m2 or it would be excluded. With the advent of accurate satellite imagery and aerial photography, DG Agriculture required member states to embark on a mass digital mapping exercise to hunt down every aberrant patch of land and banish it from the farm payments system. Mapping is now done annually, so creating many jobs for people sitting in front of computer screens, remapping farmland.

Greenwashing

The latest wheeze to persuade the increasingly sceptical European public and politicians that the CAP really was delivering public goods and wasn’t just a generous welfare payment to wealthy landowners, was greening. Greening – the word has so many connotations. Greenwash also comes to mind. The idea behind greening was that a fair chunk of Single Farm Payment, would be paid on condition that Farmers delivered some environmental benefits in return for their subsidy. This might include, for example, retaining areas supporting wildlife or creating ones if there weren’t any. It might include attempts to protect high nature value landscapes beyond the farm scale, helping farmers to co-operate to maintain the fabric of the landscape, for example. Or it might include helping to deliver related objectives such as protecting the Natura 2000 network, or the Water Framework Directive.

But, thanks to the usual highly effective lobbying by the Agro-industry, the greening measures have been watered down, watered down again and amended until they have reached and exceeded the absurdity threshold. I can only assume the plan was to amend and weaken the rules until they become patently absurd, so that they are either abandoned or ignored. We now have a 3 crop rule which requires arable farmers to plant at least 3 different arable crops on their land each year. This has minimal environmental benefit but is creating a great deal of animosity among arable farmers. Another rule relates to Permanent Pasture, which must be retained, but only at the Member State level. This is the same as it was previously, providing no environmental benefit. Finally Ecological Focus Areas will have to cover 5% of their land. In practice this will probably just be the areas that have been deemed ineligible for single payment, so no environmental benefit there either. A very recent paper has concluded that greening will achieve nothing and could be regressive in its impact for nature.

Defra with no fanfare crept out some rules for Greening on Monday. By yesterday there was uproar when it became clear that Defra has decided that Ecological Focus Areas can include Field Beans, Peas and even Soya Beans, on the justification that they are good for the soil. Owen Paterson then gave this announcement confirming that Soil Protection Reviews were being abandoned and GAEC rules were being simplified, while fines for non-compliance would be reviewed to make them more proportionate (ie reduced).

Andrew Clark at the NFU explained why including peas which are subject to a barrage of insecticides to create that perfect little frozen green jewel we all love, was such a good move for nature and the public.

“Comparing nitrogen-fixing crops with permanent pasture, obviously the pasture will have greater biodiversity,” he said. “But we believe a range of options should be available to farmers. Anyone with broad beans in their garden will see they are full of pollinators at the moment.

“Wildflower meadows tend to have quite a limited flowering season but some legumes are flowering from April to June, and others much later in summer. We think including this measure is very positive for the environment.”

I know and like Andrew and I am sure he had a wry smile on his face as he trotted out this classic piece of CAP doublethink. The clue is in the name “ecological focus areas”  – that they should be areas on a farm where the focus was on its ecology. Oh well – more CAP collective psychosis.

 

A Pea Viner with Ecological Focus Area

(Photo: David Wright [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)%5D, via Wikimedia Commons)

If there were transferable biodiversity obligations, The Lincolnshire Pea Farms could sell their entire area of peas as EFA and make a whole load more money.

The Green Box

And so, with every turn of the CAP cycle, one set of absurd rules is replaced by another, rules accrete on rules, but actually very little changes. A disproportionate amount of CAP subsidies go to the big farms, while the small farms especially small holders, are either excluded from the club altogether or fall foul of the rules in one way or another. The CAP continues to support and encourage intensive farming at the expense of extensive production methods. The Hey Day of Agri-environment schemes are over, and the budget for these schemes in the coming CAP round is smaller than the previous one.

The first skirmishes to reform the CAP took place at least 20 years ago, with the proposed MacSharry’s “green box”, which was originally a way of protecting farm subsidies from the rules of the General Agreement on Tariffs and Trade (GATT). Since then the green box (think of it as a cardboard box if you will), has grown, changed shape, been sat on, set fire to and dropped in a large puddle. Each time, some new sticking tape has been applied to hold it together, it’s been put on a radiator to dry out. And it’s had a new lick of paint every seven years. But the reality is that the green box has been sitting in the back of the CAP Land Rover for 20 years now, being gnawed at by the farmers dog, with various members of the CAP farming family looking at it askance, trying to work out why it’s there, what it’s for and what’s in it.

Broken CAP

Perhaps it is time to throw the green box away. I don’t mean get rid of the environmental benefits derived (often unintentionally) from the CAP. I mean get rid of the CAP itself.

There is such a thing as the sunk cost fallacy. Because we have invested a great deal of effort, money, emotional energy and personal credibility in a project, despite all the evidence that the project failed long ago, we continue to think, just one more go, it’ll work this time. It’s a flaw in human psychology – I suppose it could be related to optimism bias.

This is the case with CAP and environmental benefits. We have tried and tried – some people have worked on this their whole career. Of course they’re not going to want to stop. They would lose their jobs for a start. One could argue there is a whole CAP reform industry which has grown up around the semi-theological belief that the CAP can be reformed to deliver public environmental goods.

But it can’t. It’s been tried – again and again – and every time, the powerful Agro-industrial lobby prevails. That lobby operates extremely effectively, here in the UK, in France, Germany and other members states, and of course the lobby at Brussels. The innately pro-CAP eurocrats at DG Agriculture are cut from the same cloth, indeed I suspect there is as much of a merry go round between the EC, the agro-thinktanks and the Lobby as there is in Westminster.

The CAP swallows 40% of the EU budget – down from 70% in 1984. That 40% equates to £4 billion a year spent in the UK – £4Bn given to farmers (the majority in the UK goes to farmers with large landholdings) with practically no requirement to provide any sort of public environmental or social goods in return. It’s a welfare payment to some of the richest people in the UK.

An Unholy Alliance?

Opposition to the continuing CAP welfare payments has come from unlikely sources. The Libertarian right objects to all forms of public subsidy or support. George Eustice, now Defra junior minister, was once a UKIP candidate for the European Parliament. He has called for the CAP Single Payment to be abolished and replaced with “transferable biodiversity obligations”. This would have the effect of focusing subsidy onto areas with high biodiversity. The logical consequence is that it would lead to a market in tradeable biodiversity obligations – or biodiversity offsets as they are also known.

While UKIP is itself clearly intent on removing the UK from the EU and therefore the CAP, it is actually still very supportive of farm subsidies. The Greens support CAP reform and a move towards a system which supports small farmers and the environment. The mainstream parties continue to talk about CAP reform. Within days of becoming Secretary of State for the Environment, Owen Paterson stated that he would like to see farm subsidies abolished, though he has softened his rhetoric since then. Paterson has appeared to join in with the “Public Goods for Public money” chorus which has been heard quite loudly in this round of CAP reform, not least from EC Commissioner for Agriculture Dacian Ciolos. The reality though is that Paterson, Eustice Ciolos et all have again caved in to the overweaning power of the Agro-lobby. The public goods produced from CAP funding are far outweighed by the public bads of support for intensive farming and everything that does to the environment and communities.

It is possible to see a way forward to slay the CAP beast, bringing together an unlikely alliance of Eurosceptics, free marketeers, libertarians, agrarians and environmentalists. Of course it may happen anyway if the EU implodes, or for the UK, if we leave the EU. While the neoliberal right may argue for the abolition of CAP and nothing in its place, this is based on valuing the provision of goods and services to society either at zero, or only a value that a market could determine. What value can a market place on hearing a cuckoo in Spring, or seeing a hawthorn bush in flower? This is the fundamental concern over Biodiversity Offsetting, another neoliberal panacea beloved by Secretary of State Paterson. The alternative to a market-based “payment for ecosystem services” approach, would be public funding for public goods.

Public Goods for Public Funds

Landowners who managed their land in such a way that it provided public goods, such as clean water, flood prevention, carbon storage (and reduced GHG emissons), healthy pollinator populations, biodiversity and so on, would receive recompense for so doing. I would avoid the profits foregone approach enshrined in the CAP payment calculations, but I am no economist and am not going into the details of how best to “price” such things, many of which are intangible anyway. Applying the mitigation hierarchy to land management would also seem like a sensible approach. Landowners who avoided doing any environmental damage through their farming activities and actually contributed to environmental restoration or maintenance would be rewarded. Landowners who chose to use farming operations that caused environmental damage would have to do as much as possible to avoid that damage, and where there was damage, to pay compensation to mitigate the damage. A robust but fair set of regulations would provide the baseline of environmental protection. Implementation would need to across Europe, but whether it needs overarching European legislation rather depends on what state Europe, as a political framework, finds itself in. A European framework directive for land use could set the terms of payments for public environmental and social goods at the member state level; or the whole thing could be devolved to member states. The mitigation hierarchy would have to be a central plank within such a Directive.

So, for example, regulation would ensure that it would no longer be possible for farmers to plant large areas of maize in a vulnerable catchment, and no maize could be grown on sloping land. Where maize was grown, a compensation payment would be made, to fund land management operations which mitigated the environmental impact of that maize. If the impact could not be mitigated, then it could not be grown.

There would have to be a lot of metaphorical nose-holding for the different political tendencies to work together on this, but it could be done.

An edited version of this post appears on The Green Alliance Blog today.